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concluding the movant had not demonstrated counsel's testimony was "essential to the matter at hand and only available through her testimony"
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2021-0751-SEM
05-31-2022
Deborah Harker v. Kwanza Grimes and Ashley Vogel,
Jason C. Powell, Esquire Thomas J. Reichert, Esquire Tiffany M. Shrenk, Esquire MacElree Harvey, LTD.
Submitted: February 11, 2022
Jason C. Powell, Esquire
Thomas J. Reichert, Esquire
Tiffany M. Shrenk, Esquire
MacElree Harvey, LTD.
Dear Counsel:
Under Delaware law, a principal may appoint agents to act on her behalf through a power of attorney. Her appointment may, however, be challenged by her spouse, children, parents, or other interested parties, through an action in this Court. This provides protection to and for the principal. But she does not need to accept such "help." When a power of attorney is challenged by someone other than the principal, the principal may move to intervene and have any such action dismissed. Such is the issue before me.
Here, a principal appointed an agent through a power of attorney, but her daughter has concerns about the arrangement and filed this action to remove the agent, and for other relief. The principal has now moved to intervene and submitted a proposed motion to dismiss the daughter's action in full. In response, the daughter seeks to disqualify the principal's attorney because the attorney also represents the agent, which the daughter argues is a conflict of interest. The daughter also argues that the principal's request to intervene should be denied because the principal lacks capacity to challenge this action and the motion to intervene was not timely filed.
For the reasons provided herein, I find the petitioner's motion to disqualify should be denied and the principal's motion to intervene should be granted. I further find the daughter's petition should be dismissed. The principal is presumed to have capacity and the daughter failed to state a prima facia case that the principal lacks capacity such that further inquiry would be appropriate. The dismissal should, however, be stayed as explained herein.
This is my final report.
Unless otherwise noted, the facts recited herein are taken from the amended petition. Docket Item ("D.I.") 10.
The motions before me arise from a dispute involving the power of attorney executed by Betty B. Harker (the "Principal") on December 30, 2021, through which she appointed Kwanza Grimes, her grandson, as her agent (the "POA"). The Principal's daughter, Deborah Harker (the "Petitioner") challenges the POA. I begin by setting the stage, as pled by the Petitioner.
See D.I. 11 Ex. A.
The Principal is 94 years old. For many years she lived in Wilmington with her husband Robert Harker until his death in 2011. When Mr. Harker passed, the Principal inherited his Edward Jones investment account, which the Petitioner believes has a present value of approximately $2.5 million (the "Investment Account"). Although supported financially, Mr. Harker's death left the Principal alone in their home. In 2014, while living alone, the Principal fell and broke her hip. The Principal's hip was surgically repaired, but she has struggled with her mobility since.
D.I. 10 ¶4.
Id. ¶5.
Id. ¶18. The Respondents disagree that the Investment Account was inherited by the Principal and contend the Principal co-owned the account with her husband before he passed. D.I. 11 Ans. ¶18. The Respondents further contest the valuation, representing it is $1.8 million. D.I. 11 Ans. ¶18. Per the Respondents, around 2014, the Petitioner was added to the Investment Account for the Principal's convenience. D.I. 11 Countercl. ¶5. But see D.I. 10 ¶18 (pleading that the Petitioner is a co-owner).
D.I. 10 ¶6.
Id.
Despite her limitations, the Principal continued to live alone until October 2019, when she fell again and broke her other hip. Following her second fall, the Principal moved in with the Petitioner in Maryland. The Principal and the Petitioner continued to live together until May 2021. Then, the Petitioner had her own medical event and was hospitalized for about two weeks. While the Petitioner was in the hospital, the Principal's grandson Kwanza Grimes and his wife Ashley Grimes(together, the "Respondents") stayed at the Petitioner's house to take care of the Principal and the Petitioner's pets.
Id. ¶¶6-7. I accept the Petitioner's averments regarding which hip was broken when, acknowledging the Respondents' answer denies such specification "for lack of sufficient information." D.I. 11 Ans. ¶¶6-7.
D.I. 10 ¶8.
Id. ¶8.
The Petitioner used Mrs. Grimes' maiden name (Ashley Vogel) in her pleading; I instead accept the representation that she has legally changed her surname to Grimes and refer to her as such in this report. See D.I. 11 Ans. ¶3.
D.I. 10 ¶10.
When the Petitioner returned from the hospital, in May 2021, things had changed between the Petitioner and the Principal. The Principal was suddenly more hostile towards the Petitioner, and the Petitioner believes the Respondents are to blame. While the Petitioner was away, she believes the Respondents took advantage of the Principal's deteriorating mental state to taint her against the Petitioner.
Id. ¶11.
Id. Again, I accept the Petitioner's averments although the Respondents deny them and represent, instead, that the Petitioner was hostile toward the Principal. See, e.g., D.I. 11 Ans. ¶11.
D.I. 10 ¶¶11-2.
Regarding the Principal's alleged deteriorating mental state, the Petitioner avers as follows:
[The Principal]'s mental capacity has declined for several years and continues to do so. On occasions, [the Principal] would express delusional statements and exhibit delusional and grandiose behavior. [The Principal] would say that Joe Biden lived in her home town of Summersville, WV. Her memory also became very poor as she frequently would ask the same questions several times forgetting the answer each time. She forgot to care for and clean her hearing aids causing them [to] often not work property. [The Principal] remained physically weak because of her prior falls and age and was reliant on others for assistance.
Id. ¶12. The Respondents largely denied these allegations, adding that the Principal "has stated that Joe Biden had a summer or vacation home in West Virginia near where [the Principal] grew up. Further, [the Principal's] hearing aids did not work at times because the batteries needed to be replaced, and [the] Petitioner failed and/or refused to help [the Principal] replace the batteries of her hearing aids." D.I. 11 ¶12.
The Petitioner further avers "since [the Principal] has resided with [the] Respondents, she has not been competent to execute a Will or a sale of real property." Regarding the POA, the Petitioner contends the Principal "was incapable of comprehending the [POA]" when executed or "of resisting the undue influence of the Respondents." The Petitioner pleads "[d]ue to [the Principal]'s advanced age, memory loss, significant cognitive deterioration and decline during the time of execution of the [POA] and other issues as set forth [in the petition], she did not possess the requisite legal capacity to execute those documents or authorize these transactions."
D.I. 10 ¶21.
Id. ¶33.
Id. ¶41. The Respondents disagree that the Principal lacks capacity. See, e.g., D.I. 11 Ans. ¶41.
In June 2021, a month after the Petitioner returned home, the Respondents and the Principal moved out of the Petitioner's home and into the Principal's home in Wilmington. The Respondents accused the Petitioner of fraud and theft, even threatening to have criminal charges filed. The Petitioner denies these accusations and, instead, avers that the Respondents are the bad actors.
D.I. 10 ¶13. The Petitioner alleges the Principal was taken from the Petitioner's home, whereas the Respondents contend the Principal requested to return home. See D.I. 11 Ans. ¶13.
D.I. 10 ¶13-14. In their answer and counterclaim, the Respondents aver the "Petitioner, without [the Principal's] knowledge or approval, took out an equity line of credit on [the Principal's] home . . . ." D.I. 11 Ans. ¶38.
Further, the Petitioner raises concerns about the Principal's care and treatment in her home, with the Respondents. Although the Principal's home has four bedrooms, the Petitioner sleeps in the living room. This placement further concerns the Petitioner because the only full bathrooms are upstairs and the Principal cannot access them on her own, as she uses a wheelchair. The Petitioner has further safety concerns, pleading that the Principal's house has significant clutter.
D.I. 10 ¶15. The Petitioner avers the placement is "a bed in the living room" whereas the Respondents contend they "converted a downstairs living room into a bedroom". D.I. 11Ans. ¶15.
D.I. 10 ¶15.
Id. The Respondents deny this allegation. D.I. 11 Ans. ¶16.
It is in this setting that the Petitioner avers the Respondents are mistreating and taking advantage of the Principal. And they are allegedly doing so with the help of the POA. "[P]rior to June 15, 2021, [the Principal] had a durable power of attorney appointing [the Petitioner] as her agent." But when she moved back into her home, the Principal signed a durable personal power of attorney naming Mr. Grimes as her agent. Six (6) months later, in December 2021, the Principal signed the POA, which continued to name Mr. Grimes as her agent.
D.I. 15 ¶26.
D.I. 6 Countercl. ¶4.
D.I. 11 Countercl. ¶4. It is unclear how the POA differs from the first one appointing Mr. Grimes.
With the POA, the Respondents have withdrawn money from the Investment Account. The parties disagree about the amount of money withdrawn, whether it was for a proper purpose, and what role Mrs. Grimes has played (if any). The Petitioner further asserts that Mr. Grimes used the funds to purchase himself a BMW. The Respondents counter that the withdrawals were made in response to threats from the Petitioner regarding cutting off the Principal's access to the Investment Account. The Petitioner also asserts that Mr. Grimes orchestrated a transfer of the Principal's home into his name.
D.I. 10 ¶19.
Id.; D.I. 11 Answer ¶19.
D.I. 10 ¶19; Mr. Grimes responded that the Principal "bought [Mr. Grimes] his cars since he was 16 years old." D.I. 11 Answer ¶19.
D.I. 11 Ans. ¶19.
D.I. 10 ¶21.
II. PROCEDURAL POSTURE
This action was initiated two months after the Principal's move and execution of the first power of attorney. On August 31, 2021, the Petitioner filed the underlying petition to remove Mr. Grimes as the Principal's agent under the POA.The Respondents filed an answer and counterclaim, as well as a motion to dismiss, on November 1, 2021. On December 3, 2021, the Petitioner filed an amended petition. The amended petition contains five counts: (1) removal of Mr. Grimes as the Principal's agent under the power of attorney; (2) a demand for accounting; (3) undue influence; (4) lack of capacity; and (5) unjust enrichment. After the amended petition was filed, but before the Respondent answered, the Principal executed the POA. The Respondents then answered the amended petition and asserted the following counterclaims: (1) retitling of the Investment Account in the Principal's name only and (2) breach of the Durable Power of Attorney Act by the Petitioner. On January 19, 2022, the Petitioner answered the counterclaims.
D.I. 1.
D.I. 6, D.I. 7.
D.I. 10.
Id.
D.I. 11.
D.I. 15.
After the pleadings closed, the Principal filed a motion to intervene, through the same counsel that represents the Respondents, Tiffany M. Shrenk, Esquire ("Counsel"). The motion to intervene asserts that despite the Principal's age, she has never been diagnosed with dementia or any cognitive impairment, even after evaluations on October 14, 2021, and December 28, 2021. Rather, the Principal avers that her doctor found "no evidence of any substantial or impairing cognitive impairment." The motion to intervene attaches a proposed motion to dismiss, which further argues that the Principal has capacity to challenge the action and wants it dismissed in full under 12 Del. C. § 49A-116(c).
D.I. 12.
Id. ¶5.
Id.
The Petitioner did not respond until after I issued a minute order warning that the motion would be granted unless an objection or response in opposition was filed by February 3, 2022. On February 2, 2022, the Petitioner filed a motion to disqualify Counsel, as counsel for the Principal and filed an opposition to the motion to intervene. Both motions have been fully briefed and are ripe for my consideration. The parties have also joined issue on various discovery disputes, which I decline to address as explained herein.
D.I. 16.
D.I. 17-8.
D.I. 24, 27, 30.
III. ANALYSIS
In this report, I address the pending motions to disqualify and intervene. I go one step further to also address the proposed motion to dismiss, because the parties have already joined issue on the request for, and standard of review on, dismissal; further briefing would be an inefficient use of the parties' and this Court's time and resources. Because I find this action should be dismissed, I decline to address the discovery motions. I first turn to the motion to disqualify, then I address the motions to intervene and dismiss.
A. The motion to disqualify should be denied.
The Petitioner seeks to disqualify Counsel, as the Principal's attorney. The Petitioner argues that "[t]here is an inherent conflict of interest in representing both the alleged victim of undue influence and the perpetrators of such alleged misconduct." The motion to disqualify pits two competing concerns against each other: conflict of interest and a litigant's ability to be represented by the counsel of their choice. Additionally, the Petitioner argues Counsel cannot serve as the Principal's counsel because she will be a necessary witness. I disagree and find that neither argument supports disqualification.
D.I. 18 ¶11.
"[D]isqualification of counsel is an extreme remedy that should be employed only when necessary to ensure the fairness of the litigation process." The Petitioner bears the burden of proving by clear and convincing evidence "(1) the existence of a conflict and (2) . . . how the conflict will prejudice the fairness of the proceedings." The Petitioner "must have evidence to buttress [her] claim of conflict because a litigant should, as much as possible, be able to use the counsel of [her] choice." Accordingly, "[v]ague and unsupported allegations are not sufficient to meet this standard."
Fernandez v. St. Francis Hosp., Inc., 2009 WL 2393713, at *5 (Del. Super. Aug. 3, 2009).
Appeal of Infotechnology, 582 A.2d 215, 221 (Del. 1990).
Acierno v. Hayward, 2004 WL 1517134, at *4 (Del. Ch. July 1, 2004).
Id. at n. 34.
Under Delaware law, and subject to certain exceptions, an attorney "shall not represent a client if the representation involves a concurrent conflict of interest."A concurrent conflict of interest exists where the representation is "directly adverse" or "there is a significant risk that the representation of one or more clients will be materially limited by the lawyer's responsibilities to another client, a former client or a third person or by a personal interest of the lawyer." Additionally, "[a] lawyer shall not act as advocate at a trial in which the lawyer is likely to be a necessary witness . . . ." But the mere possibility that an attorney may be a witness does not make the attorney a "necessary" witness. "To be 'necessary' for purposes of disqualification, the attorney's testimony cannot be merely cumulative."
Del. Lawyers' R. Prof'l Conduct 1.7(a).
Del. Lawyers' R. Prof'l Conduct 1.7(a)(2). Certain exceptions exist; an attorney may represent a client if: "(1) the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client; (2) the representation is not prohibited by law; (3) the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal; and (4) each affected client gives informed consent, confirmed in writing." Del. Lawyers' R. Prof'l Conduct 1.7(b).
Del. Lawyers' R. Prof'l Conduct 3.7(a).
Scott v. New Drug Servs., Inc., 1990 WL 135932 at *3 (Del. Ch. Sept. 6, 1990).
Assuming the Petitioner has standing to challenge the Principal's choice of counsel, the Petitioner has failed to prove by clear and convincing evidence that a conflict of interest exists. The Petitioner argues it is a conflict to have the same attorney representing the Principal and the Respondents who are accused of undue influence and unjust enrichment at the expense of the Principal. But this conflict only exists if the allegations in the amended petition are ultimately proven. The Petitioner has failed to present any evidence-let alone clear and convincing evidence-in support of what are, currently, mere allegations. As such, the Petitioner has not met her burden of proving the conflict of interest by clear and convincing evidence and the extreme sanction of disqualification is not warranted.
For the Petitioner to have standing for a motion to disqualify, she must "demonstrate that the opposing counsel's conflict somehow prejudiced his or her rights." Appeal of Infotechnology, 582 A.2d at 221 (emphasis in original). The Principal failed to raise standing in the opposition and, as such, the issue has been waived. Emerald P'rs v. Berlin, 2003 WL 21003437, at *43 (Del. Ch. Apr. 28, 2003) ("It is settled Delaware law that a party waives an argument by not including it in its brief.").
The Petitioner has likewise failed to prove that Counsel is a necessary witness. The Petitioner argues that Counsel is a necessary witness because she knows relevant information, gained through interviews with the Principal, review of the Principal's records, and conversations with the Principal's doctors. But such does not make Counsel a necessary witness. The Petitioner has failed to demonstrate that Counsel has non-privileged information that is essential to the matter at hand and only available through her testimony. Counsel did not draft, nor was she involved in the execution of, the POA. Rather, any testimony by Counsel would be merely cumulative or duplicative.
* * *
Disqualification is an extreme remedy. The Petitioner bore-and failed to meet-a high burden of proof by clear and convincing evidence. Thus, the motion to disqualify should be denied.
B. The motions to intervene and dismiss should be granted.
By statute, the principal of a power of attorney has a right to intervene in actions challenging her power or seeking relief against her named agent. "Upon motion by the principal, who shall be presumed to have legal capacity, the Court shall dismiss [such] petition . . ., unless the Court finds that the principal lacks capacity to revoke the agent's authority or the personal power of attorney." When the principal of a power of attorney seeks to intervene and dismiss litigation, "the petitioner may attempt to make a prima facie showing the principal lacked capacity at the time of the conveyance of the power of attorney [or to make the present motion]. If the petitioner makes such a showing, the Court will then investigate the principal's capacity." Taken together, a principal of a power of attorney has a right to intervene and a qualified right to seek dismissal of an action challenging her power, the latter of which she may only exercise if she has sufficient capacity to do so. She must also assert her right to intervene in a timely manner.
12 Del. C. § 49A-116(b)(1). See also Ct. Ch. R. 24(a). The Respondent argues the right to intervene "is conditional on the Court making a determination about whether or not the principal of the power of attorney possesses capacity to revoke the agent's authority." D.I. 17 ¶3. I disagree. Although 12 Del. C. § 49A-116(c) does not expressly reference intervention, it presumes as such. It is, instead, the requested dismissal that is conditioned on capacity. 12 Del. C. § 49A-116(c). I find a principal's intervention is as of right and falls under Court of Chancery Rule 24(a).
Parkhurst v. Nalley, C. A. No. 11930-VCZ, D.I. 136 at 2 (Del. Ch. Jul. 22, 2019).
See Ct. Ch. R. 24.
The Petitioner makes two arguments in opposition to the motions to intervene and dismiss. First, that the Principal lacks capacity and second that the motion is untimely. I address these in turn.
i. The Petitioner has failed to state a prima facia case of incapacity.
As explained, a principal has a right to intervene in an action challenging her power of attorney. But her ability to seek dismissal of that action is conditioned on her having "legal capacity" to so move. The appropriate test for a principal's capacity is contractual capacity. "Lack of contractual capacity will be found if [the Principal] was 'incapable of understanding the nature and effect of the transaction' or her mental faculties were so impaired as to render her 'unable to properly, intelligently and fairly protect and preserve [her] property rights.'" A lack of contractual capacity must be shown by more than a "gradual weakening of mental capacity[.]" But, importantly, principals, like testators, are entitled to a presumption of capacity. As the party challenging capacity, the Petitioner bears the burden of presenting a prima facia case of lack of capacity. Only if she does so can-and will-this Court decline to grant a principal's motion to dismiss and order further inquiry into the principal's capacity.
See Parkhurst v. Nalley, C. A. No. 11930-VCZ, D.I. 136 at 2 (Del. Ch. Jul. 22, 2019), D.I. 107 at 25:14-20, 44:15-18 (Del. Ch. May 2, 2018) (Glasscock, V.C.) (TRANSCRIPT).
McAllister v. Schettler, 521 A.2d 617, 621 (Del. Ch. 1986) (internal citations omitted).
Id. "A gradual weakening of mental capacity, even when accompanying extreme old age and serious illness, will not alone disable someone from making a contract." Id. at 621.
This procedure was first articulated by Vice Chancellor Glasscock in Parkhurst v. Nalley. Its gatekeeping function is of paramount importance and mirrors the gatekeeping this Court exercises with other capacity challenges, namely, adult guardianships and will contests. In the former, this Court will not schedule a hearing on a petition for guardianship or appoint an attorney ad litem for a person with an alleged disability unless the petitioner seeking guardianship has pled sufficient allegations regarding lack of capacity. The petitioner(s) must do so in their originating petition and with the support of a physician's affidavit, on the Court's form. Similarly, a will contest alleging lack of testamentary capacity, weakened intellect, or susceptibility will not survive a motion to dismiss for failure to state a claim unless the plaintiff avers specific, non-conclusory facts as to diminished capacity. In both arenas, this Court ensures that the party challenging capacity states a non-conclusory basis for their challenge before the Court will allow further inquiry or investigation. By drawing this line, the Court shows great respect for, and protects, personal liberty, autonomy, and dignity.
Parkhurst v. Nalley, C. A. No. 11930-VCZ. In Parkhurst, Vice Chancellor Glasscock found the petitioner failed to state a prima facia case of incapacity in her pleading or in opposition to the principal's motion to dismiss, which supported dismissal. But he "stay[ed] the dismissal for a period of 20 days to allow the petitioner, should she so desire and if she finds herself able, to file either an opposition to the dismissal in affidavit form or an amended verified petition averring facts that, if true, would lead [the Court] to the necessity to go forward with lack of capacity." Parkhurst v. Nalley, C. A. No. 11930-VCZ, D.I. 77 at 48:14-20 (Del. Ch. Sept. 13, 2017) (Glasscock, V.C.) (TRANSCRIPT). The petitioner did so amend, which amended pleading was later addressed and found sufficient, as further explained herein.
See Ct. Ch. R. 175-176.
See In re Hurley, 2014 WL 1088913, at *4 (Del. Ch. Mar. 20, 2014).
The same policy applies here. Conclusory or vague allegations of lack of capacity should not be sufficient to force an inquiry into a principal's capacity. Otherwise, the statutory power to appoint agents of one's choosing and the presumption of capacity to seek dismissal of challenges to such appointment are meaningless.
Having set the stage, I must address whether the allegations, as pled by the Petitioner, are sufficient to overcome the presumption. Parkhurst is, again, instructive. In Parkhurst, the Vice Chancellor pressed the petitioner to identify factual allegations of lack of capacity, akin to an analysis for reasonable conceivability under Court of Chancery Rule 12(b)(6). There, the petitioner alleged facts showing the principal believed (1) she was being followed, (2) that her deceased husband was still alive, and (3) that people were lurking in her attic. The petitioner further averred that the principal was unable to recollect legal actions she had taken. Based on these averments, Vice Chancellor Glasscock found the petitioner plead a prima facia, or reasonably conceivable, claim for lack of capacity and ordered further evaluation of the principal's capacity.
See generally Parkhurst v. Nalley, C. A. No. 11930-VCZ, D.I. 107 (Del. Ch. May 2, 2018) (Glasscock, V.C.) (TRANSCRIPT).
Id. at 44:9-14.
Id.
Id.
The Petitioner's averments are much less compelling. The Petitioner pled the Principal "would express delusional statements and exhibit delusional and grandiose behavior" and provided one example of such delusions, relating to the current president. The Petitioner further averred that the Principal was forgetful and "she frequently would ask the same questions several times forgetting the answer each time" and failed to care for her hearing aids. And the Petitioner avers "[d]ue to [the Principal]'s advanced age, memory loss, significant cognitive deterioration and decline during the time of execution of the [POA] and other issues as set forth herein, she did not possess the requisite legal capacity to execute those documents or authorize these transactions."
D.I. 10 ¶12.
Id.
Id. at ¶41.
I find the Petitioner failed to plead sufficient, non-conclusory factual allegations to state a prima facia, or reasonably conceivable, claim of lack of capacity. Setting aside the conclusory allegations, the Petitioner proffers one alleged delusion, a repetitive and forgetful conversation style, and failure to care for hearing aids. Even taken together, these allegations do not support that the Principal was incapable of understanding the nature and effect of the POA or her motion to dismiss or that her mental faculties are so impaired that she is unable to properly, intelligently, and fairly protect and preserve her property rights. At best they may show gradual weakening of mental capacity, which may be expected with someone of the Principal's age. But declining or weakening capacity and old age do not a reasonably conceivable claim of lack of capacity make.
Because the Petitioner has failed to state a prima facia claim of lack of capacity, the presumption should apply and this Court should not permit any further inquiry into the Principal's capacity on the current record.ii. The motion to intervene was timely.
I note, again, the Principal sought to move in stages-first seeking to intervene and then promising to file a motion to dismiss. But, because the parties have joined issue on capacity, I deal with both motions together.
The Petitioner also argues that the Principal's motion to intervene is not timely. In determining whether a motion to intervene is timely, I must consider four factors in the totality of the circumstances:
(1) the length of time the movant knew or reasonably should have known of her interest before she petitioned to intervene; (2) prejudice to the existing parties due to failure to petition for intervention earlier; (3) the prejudice the movant would suffer if not allowed to intervene; and (4) the existence of unusual circumstances weighing either for or against intervention.
Shawe v. Elting, 2015 WL 5167835, at *2 (Del. Ch. Sept. 2, 2015).
The Petitioner argues that the motion to intervene was filed after over five months of litigation and the "highly unusual and suspicious" nature of the motion supports a finding of untimeliness. I disagree and find the motion was timely.
The Principal filed her motion to intervene on January 1, 2022, less than one month after the Petitioner filed the amended petition. Not only is this a short amount of time, but I further find, based on the early stages of this proceeding, there is little, if any, prejudice to the parties. On the other hand, finding the motion was not timely would greatly prejudice the Principal by preventing her ability to protect her interests. And, although I appreciate the Petitioner's suspicious, the Petitioner has not met her burden to prove clear and convincing evidence of a conflict or a prima facia case for lack of capacity such that I could join her in those suspicions. The Principal's motion to intervene was timely and should be decided on it's merits.
See Carlyle Inv. Mgmt. L.L.C. v. Moonmouth Co. S.A., 2015 WL 778846, at *5 (Del. Ch. Feb. 24, 2015) ("The cases finding untimeliness or expressing serious concern about unwarranted delay involved delays of between five and twelve months.").
* * *
The Principal invoked her statutory right to intervene and seek dismissal of this action. Because the motion to intervene was timely filed, it should be granted. The parties, however, also joined issue on capacity, which is relevant solely to whether the Principal's motion to dismiss could be granted. In the interest of judicial efficiency and economy, I have addressed the capacity issue and find the Petitioner has failed to overcome the presumption of capacity. Thus, the motion to dismiss should be granted. But I find the dismissal should be stayed to allow the Petitioner to amend her pleading to add sufficient allegations regarding lack of capacity or file a response in opposition to the motion to dismiss, attaching an affidavit in support. This procedure was utilized early in Parkhurst, recognizing that the matter was one of first impression. Although no longer "first" impression, the analysis applied herein is not well-worn and, because the parties joined issue on capacity in response to the motion to intervene, the Petitioner has not had a full opportunity to respond to the motion to dismiss. For these reasons, the Petitioner should be permitted to amend her petition or file a response in opposition to the motion to dismiss, attaching an affidavit in support. Through these filings, the Petitioner would be provided one final opportunity to provide non-conclusory factual allegations regarding the Principal's alleged lack of capacity to overcome the presumption and avoid dismissal.
IV. CONCLUSION
For the above reasons, the Petitioner's motion to disqualify should be denied and the Principal's motions to intervene and dismiss should be granted. The Petitioner failed to present clear and convincing evidence that Counsel has a conflict of interest or is a necessary witness. Further, intervention is as of right and was sought timely. Regarding dismissal, the Petitioner failed to state a prima facia claim for lack of capacity; as such, the statutory presumption should apply and the motion to dismiss should be granted.
But dismissal should be stayed. For the reasons explained herein, and following the lead of Parkhurst, I find the Petitioner should be permitted to amend her petition or file a response in opposition to the motion to dismiss within twenty (20) days of this becoming an order of the Court. This will provide one final opportunity for the Petitioner to state a prima facia claim for lack of capacity, such that she may avoid dismissal of this action.
This is my final report and exceptions may be filed under Court of Chancery Rule 144.
Respectfully.
SELENA E. MOLINA MASTER IN CHANCERY